Final Results
To be embargoed: not to be released until 7.00 a.m.
on 15 September 2005
EUROVESTECH PLC ('Eurovestech' or 'the Company')
Preliminary Results
for the year ended 31 March 2005
Chairman's Statement
I am pleased to report on a successful year. Our portfolio companies and their
management teams have made very good progress. Eurovestech has entered this
year with a strong portfolio and the proven ability to pursue and positively
impact new opportunities.
In October 2004, we raised £5 million in an institutional placing. This has
allowed us to take advantage of certain targeted investment opportunities and
with the placing price at more than double the IPO price of March 2000; I
regard this as validation of our achievements as well as our perseverance.
Losses for the year, which represent our operating costs, were £0.66 million
against a loss of £1.15 million for the corresponding year. Net assets
increased to £13.3 million from £8.6 million reflecting the issue of shares and
the trading result. However, as I reported to you last year, given what we
consider to be the exceptionally rapid development of our unquoted portfolio,
these carrying values do not reflect `fair values': at the current stage of the
development of our portfolio companies, they are impractical to benchmark
reliably. For example, at the year end, our shareholding in Cjudge Limited
('Cjudge') was valued at its £2 million cost.
Portfolio review
Five years ago, we invested £1.2 million in Cjudge, the Paris-based online
market research company. Subsequently we made follow-on investments of £0.8
million to support the company's further development.
Cjudge's core services comprise access to its online panels of consumers, the
creation of dedicated online panels for or on behalf of clients and the
licensing and hosting of its proprietary data collection technology. Access
panels comprise pools of individuals who have agreed to participate in online
panels. It is these 'access panels' that are used to conduct market research.
In May 2005, Cjudge's business was successfully listed on AIM under the name of
ToLuna plc ('ToLuna'), raising £5 million gross from several institutional
investors, following which, Eurovestech holds just under 64 per cent. of
ToLuna's issued share capital. On flotation, the stock market value of our
holding was £16 million and it is currently £18 million.
During the year under review, ToLuna increased the number of its European
panellists to approximately 350,000. Earlier this month ToLuna reported that it
now has 550,000 panellists. ToLuna also announced that trading, in the first
half of its year (to 30 June 2005), has exceeded management's expectations.
Knowledge Support Systems Limited ('KSS'), a leading provider of pricing and
revenue management systems for the retail and petroleum sectors, won several
sizeable contracts during the year. Customers now include BP, Rite Aid,
7-Eleven, Kuwait Petroleum, Conoco Philips, Sheetz and Brookshire Brothers.
Eurovestech acquired 100 per cent. of the share capital of KSS in June 2003 for
£1 million. At that time, KSS was losing £0.5 million per month. Last month, we
announced that KSS produced an after tax profit for its year to 27 June 2005,
of more than £950,000 and had increased sales more than four-fold to over £5
million.
Magenta Corporation Limited ('Magenta') is a leading provider of intelligent
software agent technology, which enables automation of real-time negotiating
and scheduling processes. During the year, Magenta secured a `proof of concept'
contract from one of Europe's largest engineering groups.
The remainder of the portfolio, which includes holdings in MyKindaplace
Limited, Tevet Process Control Technologies Limited, ARKeX Limited, Lynx
Photonic Networks Inc., D-Pharm Limited and Atarim Web Consulting together
account for less than 15 per cent of the portfolio by carrying value.
Nevertheless, the overall performance of these businesses has been encouraging.
Charitable donations
During the year, Eurovestech issued and gifted 800,000 new ordinary shares to
several charitable organisations. These shares had a total market value at the
date of issue of £82,000. Since 2001, the company has created and gifted more
than five million shares to dozens of worthy causes. I am proud that together
with the donations to the same charities from Richard Bernstein's personal
holding, the stock market value of shares gifted to charity now exceeds £1.25
million. The company hopes its policies and actions will encourage other
companies to support charities in this way.
Prospects
The year has started well: ToLuna and KSS, our two most developed companies,
have recently reported very strong increases in both turnover and profits.
Magenta's focus on providing production-level solutions around intelligent
agent technology is translating into new business; with a sizeable contract win
secured earlier this month.
I am pleased that we are utilising our strong cash position to target selected
listed investment opportunities. Overall, I am extremely optimistic about our
prospects.
RICHARD GROGAN
Chairman
Profit and Loss Account
for the year ended 31 March 2005
Note Year ended Year ended
31 March 31 March
2005 2004
£ £
Turnover - 34,692
Gross profit - 34,692
Net operating expenses (773,012) (1,228,213)
Other operating expenses - 1,091
Operating loss (773,012) (1,192,430)
Net interest (16,979) (27,131)
Amounts written (off)/back to investments (53,315) 66,912
Unrealised gains on investments 181,262 -
Loss on ordinary activities after (662,044) (1,152,649)
taxation
Loss per ordinary Share (0.236)p (0.475p)
All operations are continuing
Balance Sheet
as at 31 March 2005
At At
31 March 31 March
2005 2004
£ £
Fixed assets
Tangible assets 1,737 3,205
Investments 9,200,930 8,467,663
9,202,667 8,470,868
Current assets
Debtors 169,299 226,124
Investments 2,674,107 56
Cash at bank and in hand 2,557,906 1,313,728
5,401,312 1,539,908
Creditors: amounts falling due within one (156,379) (1,348,003)
year
Net current assets 5,244,933 191,905
Total assets less current liabilities 14,447,600 8,662,773
Creditors: amounts falling due in more than (1,100,000) -
one year
Net Assets 13,347,600 8,662,773
Capital and reserves
Called up share capital 3,124,228 2,598,109
Share premium account 13,849,192 9,028,440
Revaluation reserve 3,170,316 3,170,316
Profit and loss account (6,796,136) (6,134,092)
Shareholders' funds 13,347,600 8,662,773
Cash Flow Statement
for the year ended 31 March 2005
Note Year ended Year ended
31 March 31 March
2005 2004
£ £
Net cash outflow from operating (i) (951,406) (1,147,029)
activities
Returns on investments and servicing of
finance
Interest received and similar income 78,374 21,176
Interest paid (95,353) (48,307)
Net cash (outflow) from returns on
investments and
servicing of finance (16,979) (27,131)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (310) (988)
Purchase of fixed asset investments (978,582) (2,323,506)
Sale of fixed asset investments 192,000 -
-
Net cash outflow from capital expenditure
and
and financial investment (786,892) (2,324,494)
Management of liquid resources
Sale of current asset investments 14,547,605 9,027,163
Purchase of current asset investments (16,895,021) (7,402,288)
Net cash (outflow)/inflow from management (ii) (2,347,416) 1,624,875
of liquid resources
Net cash flow before financing (4,102,693) (1,873,779)
Financing
Receipt of borrowings - 1,100,000
Issue of shares 5,360,500 1,717,000
Expenses paid in connection with share (13,629) -
issues
Net cash inflow from financing 5,346,871 2,817,000
Increase in cash (ii) 1,244,178 943,221
Notes to the Cash Flow Statement
i. NET CASH OUTFLOW FROM OPERATING ACTIVITIES
Year ended Year ended 31
March
31 March 2004
2005
£ £
Operating loss (773,012) (1,192,430)
Depreciation 1,778 7,348
(Gain)/Loss on disposal of current asset (145,373) 93,726
investments
Decrease/(Increase) in debtors 56,825 (70,743)
(Decrease)/Increase in creditors (91,624) (149,351)
Charges for shares issued at under value - 164,421
Net cash outflow from operating activities (951,406) (1,147,029)
ii. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Year ended Year ended
31 March 31 March
2004
2005
£ £
Increase in cash in the year 1,244,178 943,221
Cash inflow from financing - (1,100,000)
Cash outflow/(inflow) from increase/decrease in 2,347,416 (1,624,875)
liquid resources
Other non-cash movements relating to investment 326,635 (93,726)
gains
Change in net funds/(debt) resulting from cash 3,918,229 (1,875,380)
flows
Net funds at 1 April 2004 213,784 2,089,164
Net funds at 31 March 2005 4,132,013 213,784
iii. ANALYSIS OF CHANGE IN NET FUNDS
At Cash flow At
1 April 31 March
2004 2005
£ £ £
Cash in hand 1,313,728 1,244,178 2,557,906
Liquid resources 56 2,674,051 2,674,107
Debt (1,100,000) - (1,100,000)
213,784 3,918,229 4,132,013
Notes to the financial statements
1. Loss per share
The calculation of loss per share is based on the loss attributable to ordinary
shareholders of £662,044 (2004: £1,152,649) divided by the weighted average
number of shares in issue during the year, being 280,419,963 (2004:
242,595,053) shares. Warrants outstanding at the year end were anti-dilutive.
2. Dividends
No dividends were paid or proposed in respect of the years ended 31 March 2005
or 2004.
3. The results for the year ended 31 March, 2005 and the balance sheet at that
date have been extracted from the statutory accounts of the Company for that
year, upon which the Company's auditors, Grant Thornton, have confirmed they
will issue an unqualified audit report under Section 235 of the Companies Act
1985. The accounts for the year ended 31 March, 2005 will be filed with the
Registrar of Companies following the Annual General Meeting. The financial
information for the year ended 31 March, 2005 has been prepared on the basis of
the accounting policies set out in the accounts for the year ended 31 March,
2005.
The comparative figures for the period ended 31 March, 2004 have been extracted
from the statutory accounts for the Company for the period, filed with the
Registrar of Companies, which carried an unqualified audit report.
4. A copy of the Annual Report and Accounts will be sent to all shareholders
shortly and will be available from the Company's registered office, 29 Curzon
Street, London W1J 7TL.
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